Surge in Demand for US Bitcoin ETFs Outpaces New Supply by 614%

The demand for US spot Bitcoin ETFs has seen a significant surge, surpassing the new supply created daily by miners by an impressive 614%. This data was reported by Gayatri Choudry, a Quantitative Research Analyst at Bitwise Asset Management. The surge in demand for Bitcoin ETFs highlights the growing interest among both institutional and retail investors in gaining exposure to the digital asset without the need to manage the BTC themselves.

ETFs provide a convenient and regulated way for investors to participate in the potential upside of Bitcoin’s price movements while also mitigating some of the risks associated with direct ownership and custody. The impending Bitcoin halving, scheduled to occur in less than a month, will reduce the block reward from 6.25 BTC to 3.125 BTC. This event is significant as it halves the rate at which new bitcoin is generated, making BTC more scarce over time.

As demand for Bitcoin ETFs continues to rise and outpace new supply, the available bitcoin on the market is becoming increasingly scarce. This combination of increasing demand for Bitcoin ETFs and the upcoming Bitcoin halving has been the driving force behind the surge in Bitcoin’s price this year, with BTC up over 55% year-to-date at the time of writing.

Since BlackRock filed its spot Bitcoin ETF application with the US Securities and Exchange Commission, BTC has risen over 173%. Market participants are eagerly anticipating how Bitcoin will react to the upcoming halving, as this is the first market cycle in Bitcoin’s history where its price reached a new all-time high before the halving.

Historically, it would take a few months for the ‘supply shock’ to kickstart a rise in Bitcoin’s price following a halving. However, with the demand from spot Bitcoin ETFs showing no signs of slowing down, Bitcoin has already experienced a significant supply shock, and the new supply of BTC per day is about to be cut in half.

The surge in demand for Bitcoin ETFs reflects a growing trend of investors seeking exposure to the digital asset through regulated and convenient means. With the impending Bitcoin halving on the horizon, the scarcity of BTC is expected to increase, potentially driving prices even higher in the coming months.